*This article was written by Izabella De Souza for Appeagle

How to Win the Amazon Price War

amazon repricerOn such a massive marketplace like Amazon, there undoubtedly will be multiple sellers for almost all products. Shoppers compare products and may sort them according to factors like Prime availability and price.

Because competition can be fierce on a particular listing, a difference of just a few dollars or even cents can make or break a sale.

In a nutshell, repricing is the action of a product’s price changing to be able to compete with other offers within that exact product.

Anyone who runs a retail business knows that accessibility to customers is key for growth. E-commerce merchants accomplish this simply by being present on the web. And for those who choose to set up shop on Amazon, acquiring customers is even easier. As of 2014, the e-tailer had nearly 250 million active users worldwide.

With 30 million of those members having joined in 2014 alone, it’s safe to say that number will only continue to go up.

Online merchants have definitely taken notice. There are now over two million sellers on Amazon conducting sales in nearly a dozen countries. And while the opportunity for customer exposure creates an almost blinding sales appeal, it’s crucial to be aware of the increased competition factor.

Sellers need to be vigilant about how they source, fulfill, ship, and perhaps most importantly, price their products as compared to their competition.

While elements like storage, fulfillment, and shipping can easily be taken care of via FBA, price brings about a unique set of challenges.

It’s All About Price on Amazon

Shoppers consider price to be one of the most significant aspects of the purchase process.

In fact, 41% of consumers admit to just enjoying the thrill of finding the best deal, according to Retail Systems Research.

This is something Amazon noticed long ago about its buyers, and has therefore formulated algorithms and policies for which sellers must adhere. Take the ever-coveted Buy Box, for example.

While its exact algorithm is not known, it is widely acknowledged that price is one of the most—if not the most—heavily weighted components of the formula.

Amazon is a clear leader in the dynamic pricing space, with the retailer changing tens of millions of prices daily. And with price changes happening every second, manual repricing becomes an impossibility once a seller has more than a handful of listings.

Employing automated repricers has become a necessity in today’s Amazon selling landscape.

How Does Amazon Repricer Software Work?

Once securely imported from Amazon, a seller’s listings automatically populate into a repricer. After this, the software looks at the products and analyzes the offers from all sellers on a particular listing to determine a competitor(s).

A reliable repricer will not begin to reprice until a seller sets the desired “minimum price” for each listing.

By distinguishing the lowest amount for which a seller is willing to vend an item, the repricer can automate price changes without selling below the desired threshold.

Throughout the process, the software receives and analyzes the data, and reacts as fast as Amazon allows—which is usually about every 15 minutes or less.

Winning the Amazon Price War

Automated repricing is a relatively new phenomenon, but a powerful one nonetheless. So much so, that Amazon itself recognized its vitality. Amazon released its Subscriptions API in 2013 which increased the efficiency and efficacy of the repricing industry.

The Subscriptions API includes the AnyOfferChanged notification which “is sent whenever there is a price change for any of the lowest 20 offers (calculated as price plus shipping) for a specific product and condition (new or used),” said Andy Geldman of Web Retailer.andy geldman

The best repricers sync directly to Amazon’s Subscriptions API.

Repricers work best when they carry out pricing strategies that align with a seller’s business goals—which is why customization tends to be very important.

A good repricer will provide the flexibility to choose between strategies: a rule-based (or custom) strategy, an algorithmic strategy, or both.

Rule-based or custom strategies can be molded to what is best for a seller’s specific business needs. An Algorithmic strategy has a specified goal, for example, attaining the buy box.

Repricing software also generally allows sellers to narrow their competition by only competing with certain fulfillment types, sellers that are Buy Box eligible, item conditions, or sellers with a rating above a specified amount. These customizations do wonders to ensure profitability.

Make an Amazon Repricer Your Ideal Weapon

To remain relevant and be successful on Amazon, sellers must stay on top of their business and most importantly, ahead of their competition.

More and more merchants are outsourcing jobs like repricing to ensure their businesses run as successfully as possible.

Greg Girard, Program Manager of Merchandising Strategies at IDC Retail Insights says merchants “are tooling up to have visibility of prices their competitors are charging, and with better analytics they’re getting smarter about which prices to match, go below or stay above.”

About the AuthorTara graduated from the University of New Hampshire with a B.S. in Journalism / Business. Her passion for creative publishing and quality reporting landed her work opportunities at several companies in Massachusetts, New York and California. She is a leading voice behind CPC Strategy’s Blog. See all posts by this author here.